Ten major topics for 2017 related to consumer affairs

Every year, NCAC publishes "ten major topics related to consumer affairs" of the year chosen out of the cases that drew significant public attention and/or resulted in a large number of consumer inquiries.

The year of 2017 was marked by numerous inquiries about unscrupulous solicitations targeting the elderly, such as refund fraud, door-to-door purchase by high-pressure buyers, and those in new categories, such as virtual currencies and cheap smart phones.

Ten major topics for 2017

Elderly consumers have been targeted; marked by numerous inquiries about "refund fraud" and "door-to-door purchase"

Troubles related to "regular purchase" still at a high level; also involving many young people under age 20.

Widespread use of virtual currencies; after being solicited to buy like "It's surely profitable", consumers bought some and ended up with trouble.

First order for payment of surcharge under the Act against Unjustifiable Premiums and Misleading Representations; Corporate scandals undermined consumer confidence in product quality.

Enforcement of the amended Act on Specified Commercial Transactions; Civil Code was revised for the first time in 120 years.

Enhanced system for collective redress for property damage incurred by consumers; certification of Specified Qualified Consumer Organizations and amendment of the Act on the National Consumer Affairs Center of Japan, Incorporated Administrative Agency

Elderly consumers have been targeted; marked by numerous inquiries about "refund fraud" and "door-to-door purchase"

There is no end to unscrupulous tactics targeting the elderly. Although NCAC issued an alert on "refund fraud" in 2011 and 2015, numerous inquiries on this problem have been received.

The elderly constitute a high percentage of the consumers who experienced troubles related to "door-to-door purchase" by high-pressure buyers (Intending to sell disused articles at home, they were suddenly forced to sell precious metals). Some of them intended to dispose of a substantial amount of disused articles before they die and got in trouble with high-pressure buyers.

Troubles related to "regular purchase" still at a high level; also involving many young people under age 20.

Although NCAC issued an alert on "regular purchase" in 2016, numerous inquiries and complaints about regular purchase have been received from consumers including young people under age 20. Advertisements thereof often emphasize lower prices than usual (e.g. "90% off your first purchase").

Regarding "regular purchase", the government amended "the Ordinance for Enforcement of the Act on Specified Commercial Transactions" and "the Guidelines for measures against online stores' tricks to make consumers place an order against their will". As a result, online stores' obligations for representation have been added and clarified so that they are required to clearly indicate sales terms on the order screen and the confirmation screen (e.g. contract for regular purchase, individual prices and total price, contract period).

Widespread use of virtual currencies; after being solicited to buy like "It's surely profitable", consumers bought some and ended up with trouble.

In April, the amended Payment Services Act took effect and the government introduced a registration system for virtual currency exchange operators in Japan. With the introduction of the new system, some virtual currencies have attracted much attention as a new means of settlement.

On the other hand, there have been numerous troubles related to virtual currencies. After being solicited to buy virtual currency like "The price will surely go up", consumers bought some with a view to making a profit by selling it, but they neither made a profit nor recovered the amount paid.

Along with diversification of information/communications services due to relaxed regulations, there has been an increase in troubles related to these services.

More and more consumers use "cheap smartphones" because of relatively inexpensive prices. Along with the growing use, however, there has been a rise in inquiries and complaints about cheap smartphones from consumers who received services different from what they had expected. Therefore, NCAC announced some key points for choosing a cheap smartphone.

Regarding heated tobacco products, by which users inhale vapor from electrically heated tobacco leaves, cases of accidental ingestion have been reported. NCAC cautioned consumers to keep heated tobacco products out of reach of children before and after using them.

Regarding "delivery lockers", which enable people to receive delivery packages when they are away from home, there have been some cases where a child was locked inside a delivery locker while playing.

"Heated tobacco products" and "delivery lockers" have drawn public attention in recent years. As the market enlarges, the number of related accidents may increase. We need to continue to watch these problems.

There have been numerous inquiries and complaints about health foods containing "Pueraria mirifica" from consumers who suffered from irregular menstruation or other symptoms after having the health foods. It appears that Pueraria mirifica affected female physiological functions.

In response to NCAC's announcement on this issue, the Consumer Affairs Agency and the Ministry of Health, Labour and Welfare requested prefectural governments to demand business operators manufacturing or selling health foods containing Pueraria mirifica to ensure proper production management and to provide consumers with sufficient product information.

In addition, there have been some cases where consumers suffered from drug induced hepatitis after having certain health foods. NCAC issued an alert on this problem.

Business failure of the discount travel company "Tellmeclub"

In March, a travel company "Tellmeclub", which used to mainly sell discount overseas package tours, went bankrupt while having many orders yet to fulfill. The bankruptcy resulted in considerable impact on many travelers.

There is the Compensation Security Bond System to give a certain level of compensation to travelers in case of bankruptcy of a travel company. After the bankruptcy of "Tellmeclub", the Japan Tourism Agency reviewed the system and decided to increase the level of compensation.

First order for payment of surcharge under the Act against Unjustifiable Premiums and Misleading Representations; Corporate scandals undermined consumer confidence in product quality.

In January, the Consumer Affairs Agency ordered a major automaker to pay a surcharge for falsely advertising fuel efficiency better than the actual one. It was the first order for surcharge payment under the Act against Unjustifiable Premiums and Misleading Representations.

In the latter half of the year 2017, a series of corporate scandals were disclosed, which undermined consumer confidence in product quality (e.g. car completion test by unqualified personnel; falsification of product data by a major steelmaker).

Enforcement of the amended Act on Specified Commercial Transactions; Civil Code was revised for the first time in 120 years.

The amended Act on Specified Commercial Transactions was promulgated in June 2016 and was enforced on December 1, 2017. The amendment enlarged a range of services to be regulated (change from "designated rights" to "specified rights"), and strengthened measures against law-breaking business operators. Recently, there has been an increase in inquiries and complaints about contracts for medical cosmetic treatment (e.g. inappropriate solicitation, trouble over cancellation), and the relevant government ordinance was amended to include medical cosmetic treatment as specified continuous service to be regulated under the Act on Specified Commercial Transactions.

In May, the government established a law to partly amend the Civil Code, and decided to review contract provisions for the first time in about 120 years. Some of the amended articles pertain to people's lives (e.g. new provisions on general contractual conditions, clearly stated rules on apartment rental such as return of security deposit and restoration to original state).

Enhanced system for collective redress for property damage incurred by consumers; certification of Specified Qualified Consumer Organizations and amendment of the Act on the National Consumer Affairs Center of Japan, Incorporated Administrative Agency

In October 2016, the Act on Special Measures Concerning Civil Court Proceedings for the Collective Redress for Property Damage Incurred by Consumers took effect. Two organizations have been certified as "Specified Qualified Consumer Organizations", which are eligible to take civil court proceedings for collective redress for property damage on behalf of consumers.

In July, "The Consumers Smile Fund" was established to financially support activities of Qualified Consumer Organizations, etc. The Act on the National Consumer Affairs Center of Japan, Incorporated Administrative Agency was amended to enable NCAC to provide security for provisional seizure on behalf of Specified Qualified Consumer Organizations when they take civil court proceedings for the collective redress for property damage incurred by consumers.